US jobs report disappoints markets, fewer odds for Fed rate hike

The United States labour market report released on Friday, disappointed markets by adding too fewer jobs into the economy, a sign that may further allow the Federal Reserve to delay a rate hike in June this year.

The US economy added just 38,000 jobs, far below market anticipation of 162,000, data released by the US Labour Department showed Friday.

Prior to the data release, the probability of a June 14-15 rate hike as per the CME Group FedWatch tool of market sentiment remained 21 percent, which plunged to 4 percent post the data release. CME's FedWatch tool tracks the target rates based on 30-day fed funds futures contract prices, which are widely considered a reliable indicator of US monetary policy changes.

Further, Friday saw the release of April factory orders data which were boosted by prospects of demand for transportation equipment while US services grew at the slowest pace in over two years last month.

New orders for manufactured goods increased 1.9 percent, the largest increase since October, suggesting the sector is showing signs of stabilization. March's orders were revised to show a 1.7 percent increase instead of the previously reported 1.5 percent gain. However, April's rise was in line with market expectations, the Commerce Department said on Friday.

In April, orders for transportation equipment surged 8.7 percent, with bookings for motor vehicles and parts rising 2.4 percent, the largest increase since July 2015.

Meanwhile, the Institute for Supply Management said that its services index fell to 52.9 last month from April's 55.7, the lowest reading since February 2014, remaining well above the 50-point mark, signifying expansion in the economy.